Balls must offer alternative instead of carping

Dan Corry
EVERY time there is new economic data, a ritual plays out. The government welcomes the numbers, but shadow ministers claim they aren’t what they seem and that gloom is just around the corner. I remember it well from my time advising former Prime Minister Gordon Brown.

For almost a decade Tory shadow chancellors had to grit their teeth in the face of good economic news. Remember them saying that they were overjoyed that growth was continuing, inflation was low and employment was hitting record levels? Of course you don’t. They struggled to argue that underneath the surface things were not well (maybe more right than they knew) that growth was less strong than some other country or group of countries, or that the real tax take was up (even if real post tax wages were rising).

That for good or bad, is the lot of the opposition economic spokesperson. Now Labour and Ed Balls have that role to play. It is almost their constitutional duty to point out the weaknesses in the situation and on the strengths, to point to the signs of gloom and doom not the signs of emerging “green shoots”. And of course that is legitimate not least as they strongly believe that the government is following the wrong policy.

But it is very easy to fall into the trap of having a gleeful grin not when unemployment falls but when it rises, not when GDP gets back on track but when it turns out not to have risen at all over the last six months. “Talking the economy down” is the accusation and it is something that the public do not like.

How do you avoid it then? It is not easy. If you say anything positive then the government will leap on it as an admission that they are doing the right things and that your policy is therefore in tatters. So in all probability only your negative comments will get commented on in any case.

What you need to do is to present your overall view as to how to make the economy strong, to stick to that, to criticise the government for not doing that – whatever it is – but to leave yourself room to welcome good news from wherever it comes.

And as importantly you have to avoid being trapped, cornered by the turn of events. The Conservatives nearly got trapped in Labour’s “success” years, claiming it was all about to fall apart and arguing, if anything, for more spending and less banking regulation. But Osborne and Cameron neatly managed to escape at the last minute into a critique of government policy when the financial crash kicked in and eventually got to the safer ground of tucking in behind a more traditional Tory policy of deficit reduction and public spending cuts.

Balls and Miliband have been going hard on arguing that the economy is at risk from cuts that go too far too fast. They may well be right but as they will know, however bad things are now – partly due to the coalition policies – eventually growth will return. At that point Tory politicians, businessmen and commentators will turn round and say “told you so”.

That is why Balls has to do more than carp, more than critique. While it may be right to point out that even on OBR forecasts this recovery is going to be much less strong than those in the 80s and 90s, that will not convince voters that Labour could have done better or would do better in the future.

So while the weekly and monthly round of responses to data must go on, Balls and Miliband will only get Labour ready as a potential party of government again if they spend time developing and articulating what Labour’s economic strategy for growth is, and why it can work. That is the real task ahead and they need to get to it.

Dan Corry works for FTI Consulting and is a former Treasury and Downing Street adviser